5 Vanikoro Corporation currently has two divisions which had the following operating results for the year ended December 31: Cork Division Rubber Division Sales $600,000 $300,000 Variable costs 310,000 200,000 Contribution margin $290,000 $100,000 Divisional fixed costs 110,000 60,000 Segment margin $180,000 $40,000 Allocated fixed costs 100,000 50,000 Net income (loss) $80,000 (10,000) Since the Rubber Division sustained a loss during the year, the president of Vanikoro is considering the elimination of this division. If the Rubber Division was dropped at the beginning of the year, how much higher or lower would Vanikoro’s total net income have been for the year? $10,000 higher $40,000 lower А. В. $50,000 higher $100,000 lower $100,000 higher C. D. Е.

5 Vanikoro Corporation currently has two divisions which had the following operating results for the year ended December 31: Cork Division Rubber Division Sales $600,000 $300,000 Variable costs 310,000 200,000 Contribution margin $290,000 $100,000 Divisional fixed costs 110,000 60,000 Segment margin $180,000 $40,000 Allocated fixed costs 100,000 50,000 Net income (loss) $80,000 (10,000) Since the Rubber Division sustained a loss during the year, the president of Vanikoro is considering the elimination of this division. If the Rubber Division was dropped at the beginning of the year, how much higher or lower would Vanikoro’s total net income have been for the year? $10,000 higher $40,000 lower А. В. $50,000 higher $100,000 lower $100,000 higher C. D. Е.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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